New Delhi : In a disappointing start to the much-touted CSR regime, nearly two-third of the top Listed companies have failed to spend the minimum 2 per cent of profits on social responsibility activities in The First Year.
On the other hand, Mukesh Ambani-led corporate giant Reliance Industries Ltd (RIL) HAS exceeded the mandatory 2 per cent Prescribed Limit the while spending the maximum amount (Rs 761 crore) Among the Sensex companies thathave so far Disclosed Their CSR spending figures for 2014-15 – the First Financial Year for Which The New Law HAS BEEN into force.
Others who have managed to meet the target include Azim Premji-led Wipro, tobacco-to-fashion conglomerate ITC, FMCG major Hindustan Unilever and auto giant Mahindra and Mahindra.
Infosys missed the limit by a small margin as on March 31, 2015, but said it managed to meet the target after spending the Remainder amount of about Rs 3 crore in April.
So far, half of the 30 Sensex Firms have Disclosed Their CSR details for the latest financial year, but the actual CSR spending During 2014-15 for at least ten of them was below 2 per cent of Their respectively the three-year-average net profit – as required under the new Companies Act.
Together, all of These 15 companies spent a little over Rs 2,100 crore on CSR During The fiscal.
The government HAS Also set up a six-member high-level panel to suggest steps for Improved Monitoring of Social Welfare activities done by them under the Companies Law.
The companies Whose actual CSR spending was less than 2 per cent During the Year include HDFC Bank, ICICI Bank, Axis Bank, SBI, Dr Reddy’s, HDFC and Bajaj Auto. While Thanksgiving Reasons for Their respectively the shortfalls, all of them have Expressed Their Commitment to the CSR work.
Among others, Vedanta said there was “no bond for the company to spend on CSR as the average profit computed as a commission of the Companies Act for last three years is negative “. Still, it had spent Rs 25.5 crore (1.3 per cent of its last fiscal profit after tax) in the CSR Projects and Initiatives.
The new law Applies to companies with a net worth of Rs 500 crore or more, Or a turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more in a financial year.
They are overpriced required to constitute a CSR committee with three or more directors, at least one of Whom Should be an Independent Director. If a company fails to spend full or part of the Prescribed amount, it needs to explain the shortfall.
Giving the update of Their compliance status on the new law, Which came into force from April 1, 2014, five Sensex Firms have so far Disclosed CSR spending of 2 per cent or more.
RIL tops the list with the total CSR spending of Rs 761 crore (2.85 per cent). The major areas for this expenditure included Rural transformation, healthcare, education, environment, protection of the national heritage, art and culture and Disaster Response, the company said in its annual CSR report.
Infosys said the Prescribed amount required to be spent on CSR During The Last fiscal was Rs 243 crore, while the total money actually spent During The year was Rs 239.54 core.
The ‘unspent’ amount of Rs 3:46 crore was “spent in April 2015 Upon receiving pending documentation, “the company said.
Wipro spent Rs 132.7 crore (2:06 per cent), while the total spending for the ITC was Rs 214.06 crore (2:01 per cent).
Mahindra and Mahindra spent Rs 83.24 crore (just above 2 per cent), while HUL spent Rs 82.35 crore (2.1 per cent).
HDFC said its Prescribed CSR expenditure for the year was Rs 122.61 crore, while the total amount spent During The fiscal was Rs 49.18 crore. The unspent amount, after considering the committed and disbursed amount, was Rs 73.43 crore.
Explaining the gap, HDFC said It has set up a separate foundation with a dedicated team to focus on activities in the social and developmental Sector of India.
“As HDFC’s foreign shareholding Exceeds 50 per cent, any amount contributed by it to the Foundation would need the prior approval of the Ministry of Home Affairs under the Foreign Contribution Regulation Act, 2010 (FCRA) .
“The Foundation received the FCRA approval only in March 2014, hence it was unable-to-during take any Social Initiative prior to this period. Coincidentally, Section 135 of the Companies Act, 2013 Which Provides CSR bond on Specified classes of companies finns came into force During this time. HDFC there forethought it Appropriate to conduct a major part of its CSR activities through the Foundation, as the Objectives of Both were aligned, “it said.
The Home Loan Major Further said,” After receipt of the FCRA Approval by the Foundation, an implementation plan was put in place to meet the Development Objectives of HDFC as well as the Foundation, Which included the hiring of full-time employees for the Foundation. In October 2014, the employees of the Foundation came on board. “
It added,” Initially time was taken to put in place processes, evaluate Desired Projects, Their execution timelines, travel to project locations and evaluate social Investment options.
“Keeping in mind the long-term and sustainable development Objectives of HDFC (as well as the Foundation), it is of paramount importance That any funds provided by HDFC ask utilised prudently to ENSURE maximum Social benefit and development.
“Considering all the factors Stated above, the amount committed and disbursed towards CSR was Rs 49.18 crore in 2014-15. Now that the team is in place at the Foundation for sometime, HDFC intends to commit and deploy helpfull funds across Social Sectors in the coming financial year. “
HDFC Bank said its Prescribed CSR spending amount for the year was 197.13 crore, but the total spending was Rs 118.55 crore, leaving an unspent amount of Rs 78.58 crore.
“We have spent 1.2 per cent of our Net Profit as part of our CSR in the reporting period. As a Responsible banking, we have approached the Mandatory Requirements of CSR spending positively by utilising the reporting year to lay a foundation on Which to Build and scale future projects and partnerships.
“We are Currently in the process of Evaluating strategic avenues of CSR expenditure in order to deliver optimal impact. In the years to come, we will Further augment our effort to meet the targeted CSR spends, “the bank said.
ICICI Bank, Which spent Rs 156 crore (1.81 per cent) said the Prescribed CSR expenditure Requirement for the year was Rs 172 crore.
“The amount spent was Rs 1:56 billion, marginally lower than 2 per cent of average net profits of the load three financial years. The lower spending vis-s-vis the budget was due to lower than budgeted thought Requirement from Implementing Agencies and lower than anticipated direct spends, “it said.
Axis Bank, the Prescribed CSR expenditure was Rs 133.77 crore, while the total spending was Rs 123.22 crore (1.84 per cent of profit) – leaving an unspent amount of Rs 10:55 crore.
State-run SBI said it spent Rs 115.8 crore on CSR During the Year, Which was 1:06 per cent of its profits.
“The Bank Has a comprehensive CSR policy, Approved by the Executive Committee of the Central Board in August 2011 and earmarks 1 per cent of the previous year’s net profit as CSR spending budget for the year. The CSR budget for the fiscal year 2014-15 was Rs 109 crore. Against this budget, the actual CSR spending was Rs 115.80 crore During fiscal 2014-15, “it said.
Dr Reddy’s, Which spent Rs 29.17 crore (1.6 per cent), said its Efforts During the Year focused on creating additional infrastructure to expand its programs and ‘on enriching the Monitoring and impact measuring system so as to ENSURE That CSR Funds are optimally utilised “.
Its Prescribed CSR expenditure was Rs 36.61 crore, while the unspent amount was Rs crore 7:45.
Bajaj Auto’s total amount disbursed for CSR During The year was Rs 42.91 crore – about half of the total Prescribed CSR expenditure of Rs 86.33 crore.
The two -wheeler maker, however, said, “Taking into account the commitments made by the Company for CSR Projects or Programmes Which are in progress, and considering the project mode of CSR activity, where the project at times extends beyond financial year There is no shortfall As such in the CSR expenditure as Compared to the stipulated 2 per cent of the average net profits of last three financial years.
“In fact, the CSR spending, plus the commitment is higher than the mandated amount for the company, “it added.
The company overpriced invoked its famous tagline ‘Hamara Bajaj’ to stress on its focus on CSR activities of the group.
” for Society … Bajaj is more than a corporate identity. It is a catalyst for social empowerment. It is the reason behind the smile That lights up a million faces. Its goodwill resonates in The Two Simple Words That Live in the collective consciousness of Indians – Hamara Bajaj, “it said.
It said the total amount committed was Rs 119.25 crore.
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